By Marcus Leach

This week's news that the economy was showing signs of life has been dealt a blow by an unexpected fall in retail sales for January.

Office for National Statistics data shows that volumes fell 0.6% from December 2012, hurt by heavy snowfall and going against analysts' predictions. Volumes also fell 0.6% from a year ago, the first annual fall in five months.

The ONS highlighted weak sales in the food sector, which dropped 2.6% year-on-year to the lowest level since April 2004. It also said small stores had fared worse than large stores.

Smaller retailers in the food sector suggested that the heavy snow seen in the second half of January had affected sales.

“The retail uncertainty continues. It may have been a turbulent start to the year with household names such as Jessops, HMV and Blockbuster and now Republic entering administration but there is still hope for companies who take matters into their own hands and think about how to best serve the needs of their customers," Peter Saville, partner at advisory and restructuring firm Zolfo Cooper, said.

"‘E-tail’ may be one of the most popular buzzwords of the New Year but retailers shouldn’t necessarily rush to close stores. Store closures can have a massive impact on customers — especially those who prefer to shop in-store — and companies need to protect these revenues, rather than simply hand them to a competitor.”

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